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Amendment 59 Would Give the Education Lobby a Blank Check

A Rocky Mountain editorial argues that Amendment 59 will solve budget problems created by the TABOR Amendment and Amendment 23. In fact, Amendment 59 will exacerbate budget problems such as those encountered during the recent recession.

Amendment 59 would repeal portions of our tax and spending limits that have effectively constrained the growth of state spending since 1992. It mandates that surplus revenue above the TABOR limit must be transferred to the Education Trust Fund to finance spending for education P-12. Currently this surplus revenue must be rebated to taxpayers; if Amendment 59 passes taxpayers will never receive another rebate check.

Amendment 59 also mandates that surplus revenue above the Bird/Arveschough cap be earmarked and spent for education P-12. Currently this surplus can only be spent for highways and construction.

Allocating surplus revenue to the Education Trust Fund, and earmarking more general fund revenues for education p-12, will increase the share of the state budget allocated to education, at the expense of other state programs, such as transportation and construction. Spending for other state programs will still be subject to the spending caps, and we should expect substantial crowding out of these programs, as funding for education captures a larger share of the state budget.

The elimination of spending caps will result in higher levels of state spending. Colorado state fiscal policies will look more like they did prior to 1992, when these spending caps were put into place. Without these spending caps state spending can again grow more rapidly than state income; and we could again see double digit growth in state spending as we did prior to 1992.

This rapid growth in state spending will make it more difficult to balance the state budget. In periods of recession and revenue shortfall there will be more pressure to raise taxes and issue more debt to finance the higher levels of state spending. This will create a less favorable business tax climate. Currently Colorado is growing more rapidly than most states because we have a favorable business tax climate. With Amendment 59 in place we should expect lower rates of economic growth, comparable to the 1980’s when Colorado grew less rapidly than most other states.

Amendment 59 would also weaken procedural constraints built into our fiscal constitution. Currently any state or local jurisdiction that wants to increase taxes, issue new debt, or spend surplus revenue, must first seek voter approval. Under Amendment 59 citizens will lose the right to vote on expenditure of surplus state revenue. That surplus will be placed in the Education Trust Fund where it will be up to legislators, not voters, to determine when the money will be spent.

Surveys reveal that the majority of Colorado citizens approve each of the provisions of TABOR: caps on state revenue and spending; rebate of surplus revenue above those caps; and voter approval for any new taxes, debt, or expenditure of surplus revenue. The only way that the education lobby can hope to enact Amendment 59 is by obfuscating these issues. By proposing an omnibus amendment as an education finance measure, they hope to hide the fact that it weakens our tax and spending limits; and, that it earmarks more money for education at the expense of other state programs

At a time when citizens are demanding greater transparency and accountability in state government this Amendment would create even more complex rules mandating increased funding for education P-12, and leave even less discretion to the legislature in allocating the state budget. Colorado citizens should defeat Amendment 59 because it would essentially give the education lobby a blank check.

For the Issue Backgrounder of this topic, go to: https://i2i.org/articles/IB_2008_C.pdf